News
On 16 December, New Zealand Debt Management (NZDM) revealed a NZ$5 billion decrease (US$3.5 billion) to its 2020/21 financial year borrowing requirement, following the New Zealand Treasury’s half-year economic and fiscal update. The reduction means gross New Zealand government bond (NZGB) issuance in 2020/21 is expected to be NZ$45 billion.
Along with travel and tourism, Australian universities have been one of the hardest hit sectors from COVID-19. But as a clearer picture of the industry’s outlook emerges, investors were comfortable to participate in domestic deals from Western Sydney University (WSU) and University of Wollongong (UOW).
The Green Bond Principles and Social Bond Principles (GBP SBP), administered by the International Capital Market Association, launched its Climate Transition Finance Handbook on 9 December. The handbook marks a new phase in the evolution of the sustainable finance market according to market participants involved in its development.
NBN Co says the two domestic benchmark deals it issued in November and December provide good foundations for an expected increased call on public capital markets. The government-owned corporation says it will be an active issuer going forward, with offshore markets also on the cards.
New South Wales Treasury Corporation (TCorp) entered the domestic market for a new syndicated 2032 deal just a day after S&P Global Ratings downgraded its rating. The issuer says the downgrade had a negligible effect on pricing, with the Reserve Bank of Australia (RBA)’s presence in the semi-government market acting as a counterweight.
The challenging path back to budget balance rather than the first order impact of the second lockdown was behind S&P Global Ratings’ two-notch downgrade of the state of Victoria. The rating agency emphasised the long term in a 9 December webinar on its recent downgrades of Victoria and New South Wales (NSW).
On 7 December, S&P Global Ratings downgraded the states of Victoria, to AA from AAA, and New South Wales, to AA+ from AAA. S&P notes Victoria’s unusual two-notch downgrade is mainly due to the fallout from the state’s second wave of COVID-19 infections, which resulted in a substantial and prolonged lockdown.
Kiwibank has become the first New Zealand bank to test the waters for subordinated debt issuance since the Reserve Bank of New Zealand (RBNZ) revealed its new bank-capital requirements a year ago. The borrower says the impact of COVID-19 on its capital position and strong asset growth in 2020 propelled it to consider the transaction.
Ampol became the latest Australian borrower to tap the hybrid debt market, on 30 November. The issuer says the transaction had been on the cards since late 2019 and that it drew strong support from an investor base that was largely familiar with issuance under its previous guise of Caltex Australia.
World Bank capped an active year in the Kauri market with a record-breaking deal on 26 November. The issuer pursued a dual-tranche strategy designed to bring in bids from multiple investor bases, while a recent backup in New Zealand dollar yield produced a further demand bump.
Asset growth and a conservative funding strategy led Bendigo and Adelaide Bank (BEN) to print the first senior-unsecured benchmark deal by an Australian bank since the COVID-19 pandemic began, the issuer tells KangaNews. The A$650 million (US$478.4 million) five-year transaction priced on 25 November and is a rarity in a market that has been denuded of senior bank issuance.
The Australian Sustainable Finance Initiative roadmap, published on 24 November, puts forward a plan to align the Australian economy and financial system with outcomes that encourage sustainability, resilience and future prosperity. It sets ambitious targets, including some that stretch beyond federal government goals, and lays out a timeline for achieving them.